Allowed

Mohd. Abdul Nayeem v. Andhra Pradesh State Financial Corporation and 2 Others

Telangana HC4 Feb 2022WP/17859/2020

Case brief

AI extract

What is this about?

In a SARFAESI enforcement case, the High Court held that reopening the loan account after a substantially complied OTS was unfair. It directed the bank to fix interest on overdue dates, allowing payment of double that amount within 30 days to release the property and close proceedings. Writ and IA petitions disposed.

What did the court decide?

Directed Respondents to quantify interest for the OTS period; if paid double that amount within 15 days, account to be closed and proceedings quenched.

Mohd. Abdul Nayeem Vs Andhra Pradesh State… — Civil Procedure and Limitation | Telangana HC (2022)

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HIGH couRr^t?T IgESIllioF TELANGANA (SPecial Original^{Jurisdiction)}

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trAINAY THE FOURTH^{DAYOF FEBRUARY} ' 'in o rnousaND AND TWENTY TWo

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PRESENT

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THE HONOURABLE^{SRI JUSTICEUJJAL BHUYAN}

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THE HONOURABLE^{SMTJUSTICE P'SREE SUDHA}

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RIT PE Tlo NO 178 90 20

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Between:

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"?"o'ii^{uJ"lf;:5''n3!?''} Y,"jl;*?'H!J'[i"fr;'',?,^{!],#ix,i-'l'u"H]} i,Ql?i?i"?'i'1 Hlirli'iiiii,^{riJnoipatnam,Hvderabad -500028 r's}

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.-.PETITIONER

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AND

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lAndhraPradeshStateFinancialCorporation,represented-byitsAuthorized , aH;; iilrangana.o,uisir^"frIJ:r,l'"#ftff:$!:ng"r'r:'r,"1",I,,y;,6J,otTo"^' Towers,^{Opposite Maruthl 5r}

¶12

Andhra Andhra^{Pradesh Statef inancial Corporation represented by its BranchStatef inancial Corporation represented by its Branchinancial Corporation represented by its BranchCorporation represented by its Branchrepresented by its Branchby its Branchits BranchBranch}

¶13

Andhra Andhra^{Pradesh Statef inancial Corporation represented by its BranchStatef inancial Corporation represented by its Branchinancial Corporation represented by its BranchCorporation represented by its Branchrepresented by its Branchby its Branchits BranchBranch} '0#{iiiiif +'"m'ufu;l:ti'l:y.,::*3fr?ln?iiloT**bubnasar. 509 002.

¶14

3XI."?l#'"f $i'fl !Ii,,'X,sii?l',::ft 35?1:##',Je'JrELifl ?;,!;Ui;u'

¶15

Bi;; iRe;;5;;;"t^{No 3'is a rormar Party)}

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...RESPONDENTS

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Petition Under^{Article226 of the Constitutionof ..lndia praying that in the} circumstances^{stated in -t" unio"t'"t'rii"i tt"'"i t' the.Highcourt mav be pleased} to issue any^{order, w'it or. ij["iio'ii"'"o"tiry1"1v in the nature of Writof} ol"igii'r^{i""o'o'of ots oi etloztzol6andthe Letter} -ilandamus,^{catlingfor the} "n'''" AFC/MBNR/KKS^{,ro',u'a,',oti,oi'iiToaTzor o' with acknowledoement'bvdeclaring} that the^{petitioner has dischargei'il';;iil;;;ntunderoTS on 16/08/2016'bv} :i$;fiJ"','i;'^{l.prgn"or'r"1i""" J"i"i -Cut"a(o). of the} t'to -^securitv AFC/Sarfaesi^lnterest (Enforcement) Rules,^{ii'dz' " --u"0"' i"t} -^^ -oi 26tost2o2o' in respect of land Act/Notice/62870', admeasuring^{800 o,l,roro-z Sq Yds ,} "tiJ"u?looloi'^{i" "Sfi.-ftf J iSz anO358' sitauted abuttingto HUDA} Colonv, Attapur^{vittage,naten;;"ug";t-M'Jul' Rangarerldv District as illegal'} improper,^{and in violation} "t^{se?ii'sjocilnJnur-Esuno the Article 21 and 300-} A of the constitution^{ol lndra' i'ii"ioi*Jits the respondents1 and 2 to return the} orioinal documents^{deposlteof,y i"n"-putiiioiutwith ihe.resoondentsno 1 and 2'} unJer a^{Memorandum of o"pJJit"oi iir" ij""at Doct' No 2680 ol 2o1o' Dt ?2t} 07l2o1o,^{and consequentlv to-Jv} "ri^{iurtnlrproceeoingsin respectof impugned} Notice informing^{about sate ,"oli n,ji" ei6i oi tn" s""*ity lnterest(Enforcement)} Rules,^{2002, undern"i '""N" - - nFclsafaesiAci/Notice/6287010112o20'} 21lNo.59/60/61,^{Dt. 26/O5i2o2o,'in respect of abovesaid collateral secured} property.

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lA NO: 1^{OF 2020}

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Petition Und(^{r Section 151 CPC praying that in thecircumstances statedin} the affidavit^{filed in ;upport of tf," p"tltrn, tn" ilignCourt maybe ple'aseCto stay all} further^{proceedings in pursuance-Jf tn" itp'gn"iNotice info-rminqaboul sale under} Rule 8(6)^{of the ;ecuritv rnr"i"tt' iinio'"J'"1!l} t1l:^t: :002^{under Ref No -} ni&s",ii*i^{n.v Noti.6laiaiotdtrzizo-21l(o.5e/60/61, Dt. 26/05/2020,in} resDect^{of land adn easuring 466 dq VOsrn Sy No'357and 358'situated abutting} lI"LJ;; c-oionv,^{nttrpui vl[g"]n;i"no'anagarMand,al Ranqareddv district'} pending disposat^{,f tne aoovJ"viritpZtitionpe"ndingdisposalof the abovewrit} petition.

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IA O: 1 oF²⁰²²

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Petition un( -.r^{section 151 cPc prayingthatin thecircumstancesstated in} the affidavit^{filed ir support ot fne petition tne Hign Courtmay be pleas-ed to^:l"I?ll} further^{proceedings in pursuanc-e io-tf'e 'e-euctiinSale NoticeDt' 19-01-2022'in} resoect of the c(,lateral^{s"criiiy'i."atitnat tne part of House Nc4-7-7515/4'} iEi!["i"ir.i'"ⁱ v.^{r'ro. gsz u"iisaadmeasurins 800 Sq Yds ' or 668 8 sq Mts} iri n"" iii"ti'i*,^{ir roo sq e""1 lndcl at Attapui Vrllage'GHI'lc Rajendra Nagar} 6ii.rI,^'irji,tror, ,^{and oounoJ [v uottn- 25 Feet cornmon Passaseand House} Land, w3st -^{Part of} il". ioriis,^{5", in'_ r.r"ignuiir.lunJ,East} -Neishbours H. No.^{4-7-7515/4 (Western p"'ti""lGnting disposaiofthe aboveWrit Petition WP} No 17859^{of 202(.}

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Counsel^{for the I etitioner: SRI'ALIFAROOQUE}

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Counsel for the^{IlespondentNos'1 & 2 : SRI'M'HAMSA RAJ (SC FORAPSFC)}

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Counsel for^{the lespondentNo'3: NONEAPPEARE}

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The Court^{madethe followingOROER}

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HONOURABLE^{SRI JUSTICEUJJAL BHIIYAN} I AND HONOURABLE^{SMT JUSTICEP. SREE SUDHA}

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WRIT PETITI^{ON No.1 7A59 of} o

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ORDER:^{(PerHon'bleSri JusticetljjalBhuyan)}

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Heard Mr. Ali^{Farooq, learned counselfor the petitionerand} Mr.M.Hamsa Raj,^leamed Standing counsel^aPPearingfor respondents^{1 and 2.}

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By filing this^{petition under Article226 of tlre Constitution of} India, petitioner^{has challengedthe legality and validity of the} notice dated^{26.05.2020 issued by respondentNo' 1'}

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lt is stated^{that respondentNo 3 had obtaineda loan of} RS.60,O0,OOO.0O^{(Rupees Sixty Lakhs only)from respondent No'2'} Petitioner was^{the guarantorfor the loan availedofRespondent} No.3 defaulted^{in repaymentof the loanfor which respondent} Nos.1 and 2^{have invokedthe provisionsof the Securitisation and} Reconstruction^{of Financial Assets and Enforcement of Security} lnterest Act,^2OO2 lfor^{short 'the SARFAESIAct')for enforcingthe} security interest.

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Petitioner. and^{respondentNo'3 filedapplication before} respondent Nos.1^{and 2 on 06 06 2016for One TimeSettlement} (OTS). After a series^{of negotiations, respondent No'2 informed} respondent No.3^{to pay an amount of Rs45'17'679'00(Rupees} Forty Five^{LakhsSeventeenThousandSix HundredandSeventy} Nine only) together^{with further interest fromO1'06 20I6to till the} date of closure^{of the loan account on or before31 08 2O16'failing} which respondent^{Nos.1and 2 wouldbe forced to withdraw the} concession^{(OTS)andproceed further under the SARFAESIAct'}

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Ther: is no dispute to the fact that petitioner and respondent No.3 had paid the principal amount of Rs.45,17,679,OO before 31.08.201r,. In fact the above payments lr'ere n]ade in two tranches; rrstly, on 11.08.2016 for an amount of Rs.40,00,000.00 and then € gain on 16.08.2016 for Rs.5, 17,679.00,

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Whi r the matter rested thus, respondent No.l issued the impugned aotice.

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In t re hearing today, learned counsel for respondent Nos.l and 2 sub alits that there was default on the part of petitioner and responder I No.3 in making payment of further interest for the period fr rm 01.06.2016 to 31.08.2016 for which reason, responder t Nos. 1 and 2 had revived the SARFAESI proceedings.

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Lea ned counsel for the petitioner submits that petitioner would pa' even the double of the interest amount for the above period so that the matter can be settled and he is relieved of the SUarante€

¶39

Hartng regard to the above, wc are oI the view that the approach adopted by respondent Nos.1 and 2 is too ter:hnical and rigid. Ha'ing regard to what we have discussecl above, it q,ould be wholly in, quitable and unfair for respondent Nos.1 anc 2 to revert back and reopen the entire loan account ignoring the OTS arrived at betwer n the parties which was substantially complied with by petitioner and respondent No.3 by paying the entire principal amount v ithin time.

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Thr refore, in view of the submission made by learned counsel I )r the petitioner, we direct that the quantum of interest

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i I

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determined as part of OTS for the period from 01.06.2Q16 to 31.08.2016 shall be communicated by respondent Nos.1 and 2 to the petitioner and respondent No.3 within a period of fifteen (15) days from the date ol receipt of copy of this order, where after, double the quantified amount shall be paid either by the petitioner or by the respondent No.3 within a period of another fifteen (15) days from the date of receipt of the intimation. During this period respondent Nos. 1 and 2 shall not proceed further under the SARFAESI Act and if double the amount quantified as interest for the aforesaid period is paid, respondent Nos.1 and 2 shall close the loan account and all proceedings under the SARFAESI Act with consequential release of the mortgaged property and related documents.

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This disposes of the writ petition.

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Miscellaneous

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applications, if any pending, shall stand closed.

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No costs

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SD/.K.AM MAJI ASSISTANT REGISTRAR

,TRUE COPY'

SECTION OFFICER

The Authorized Officer,^{AndhraPradeshState FinancialCorporation,lTelangana} Division), having^{its MahabubnagarBranch,Vijayav,an-danaTowers, Opposite} Maruthi Showrobm,^{Mettuguda,[,4ahbubnagar-509 002.}

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The Branch f\4anager,^{And-hraPradeshState Financial Corporation, (Telangana} Division), having iti Mahabubnagar^{Branch,Vijayav-an-danaTowers'Opposite} Maruthi Showro-om,^{Mettuguda.l,4ahbubnagar-509002}

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- The Managing Shrvramoa-ilv^{"Railwav Partner,} Statron,^{MA. Olympic Metal Katiedan, Rangareddy industries,tl District, No.6-4-63,TelanganaState}

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one CC to Snt.nlt FaaOOOUE^Advocate [OPUC]

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s. One CC to SRI.M.HAMSA^{RAJ(SC FORAPSFC)} [OPUC]

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Two CD Copies

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One spare copy

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BS .

HIGH COURT

OATEO:0410212022

19 FIB 2022

ORDER

WP.No.17859^{of 202}

DISPOSING^{OF TH : W.P}

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WITHOUT COSTS.

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o $ "/ $'

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Mohd. Abdul Nayeem v. Andhra Pradesh State Financial Corporation and 2 Others

Case brief

What is this about?

What did the court decide?

Mohd. Abdul Nayeem v. Andhra Pradesh State Financial Corporation and 2 Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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